Posco Holdings reports big miss with 50% profit drop in 2022

Posco Holdings reported a 50 percent profit drop in 2022, largely due to the shutdown of its Pohang steel mill after flooding by Typhoon Hinnamnor in September.

Posco Chairman Choi Jeong-woo waves a flag celebrating the establishment of Posco Holdings. [POSCO]

Posco Holdings reported a 50 percent profit drop in 2022, largely due to the shutdown of its Pohang steel mill after flooding by Typhoon Hinnamnor in September.

Net profit was 3.6 trillion won ($2.9 billion) last year, down 50 percent on year, falling short of the 4.7 trillion won market consensus compiled by FnGuide.

Annual revenues came in at 84.8 trillion won, up 11.1 percent, falling short of the 85.1 trillion won consensus. Operating profit plummeted 46.7 percent to 4.9 trillion won. It failed to meet the market expectation of 5.8 trillion won.

Consolidated earnings include those of its subsidiaries, a list that includes Posco, Posco Chemical and Posco International.

“Profitability fell due to Posco’s halt in the operation of its Pohang steel mill, as well as the impact of a strike by cargo truckers,” the company said in Friday’s statement.

But it was helped by the “strong figures of its non-steelmaking business, such as battery materials and energy.”

Posco lost an estimated 1.3 trillion in sales as a result of typhoon damage. The Pohang plant completely resumed operations on Jan. 20, 135 days after the typhoon.

Posco Chemical generated 121.9 billion won in net profit, down 8.8 percent in 2022. Revenues soared 66 percent to an all-time high of 3.3 trillion won, while operating profit rose 36.3 percent to 165.9 billion won.

Sales of its battery material business rose 127.6 percent on year to 1.94 trillion won. The business contributed 58.7 percent of Posco Chemical’s total sales.

Net revenue of Posco International, a trading company, rose 16.1 percent to 41.7 trillion won. Operating profit jumped 48.8 percent to 1.2 trillion won.

It’s the first time the company’s operating profit exceeded 1 trillion won. Posco International merged with Posco Energy on Jan. 1.

“The 4.3-ton lithium factory in Gwangyang, South Jeolla, will be completed in the latter half of the year, which will have a positive effect on its shares,” said analyst Lee Yu-jin of Eugene Investment. “That expectation will boost the value of the company.”

On Friday, Posco Holdings announced that it will invest 59.1 billion won in Posco Silicon Solution, its 100 percent-owned silicon anode maker.

The anodes maker will build a factory in Pohang with 450 tons of annual capacity. Ground will be broken in June, with the completion scheduled for 2024.

Silicon anodes are considered the next-generation technology that can raise the energy density of batteries by four times compared to conventional anodes. It will help EVs to have a longer range and reduce charging time.

Posco Holdings shares fell 0.8 percent to 311,500 won Friday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]